“Start With Your Vision” w/ Charlotte Erdmann 305

This week we have Charlotte Erdmann as a guest on the podcast! 

Charlotte A. Erdmann is the owner and lead attorney of Orlando Tax Law. Her practice focuses on tax controversy and litigation. She earned her J.D. degree from Barry University School of Law (2010) and her LL.M. (tax) from the University of Florida (2011). She is a director in the Florida Bar Tax Section and frequent presenter and author on tax controversy topics.

4:40 tax law
7:35 starting a partnership
8:25 starting a solo practice with $800
13:32 team of 5
16:00 a law firm that supports your story
17:21 networking
19:18 lists of what you like and dislike
20:21 if you hire the money will come

Jim’s Hack: Podcast: Master’s of Scale by Reid Hoffman, and book: Blitzscaling by Reid Hoffman

Charlotte’s Tip: As things begin to open up, go out to lunch with someone you normally wouldn’t go to lunch with, learn from someone that is different than you.

Tyson’s Tip: Book: Relentless Solution Focus by Dr. Jason Selk 

Watch the recording here.

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Run your law firm the right way.

This is The Maximum Lawyer Podcast.

Your hosts, Jim Hacking and Tyson Mutrux.

Let's partner up and maximize your firm.

Welcome to the show.

Jim: Welcome back to The Maximum Lawyer Podcast. I'm Jim Hacking.

Tyson: And I'm Tyson Mutrux. What's up, Jimmy?

Jim: Oh, Tyson, my friend. How are you?

Tyson: I am doing great. I was telling Charlotte, like today, I just had to get in a different spot. Like, I'm sitting in the conference room today. I had to move around a little bit. It’s just one of those days. It’s kind of gloomy outside. It's been raining the last couple of days. But doing well, otherwise. How about you?

Jim: Great, great. Getting back in the swing of things. It's good to be recording on every Tuesday again, so I'm excited. I'm excited about our guest today, too. Do you want to go ahead and introduce her?

Tyson: Yeah. So, Charlotte Erdmann. She specializes in tax law. And I'm going to get into her bio in a second just by asking her a bunch of questions.

Charlotte, welcome to the show.

Charlotte: Thanks for having me.

Jim: Charlotte, you did a great job of filling us in on your background story. I learned a lot reading what you sent us. And I appreciate that. Can you tell our audience a little bit about, as Tyson would call it, your journey from being a young strapping Canadian to being a tax lawyer in Florida?

Charlotte: Sure.

I was born and raised in Vancouver, Canada. Law School was never really on the radar during my early years. I went to the University of British Columbia. Halfway through my university journey, my mother was diagnosed with pancreatic cancer and then passed away one month later.

I was an only child. My parents were divorced. My father lived halfway across the country in Saskatoon, Saskatchewan. Because of the upheaval that I had experienced, I kind of wanted to go for a fifth year of college. I was double majoring philosophy and religious studies. And my dad didn't like that. He didn't want to pay for it. And so, he took me to court to try to get a modification on the child support. So, I was kind of devastated.

I'm 22 years old, just lost my mother. And now my father's taking me to court. So, I prepared my own affidavit, my own financial statements, and I set a court date, and walked in there. It was open court, set for 20 minutes. I think it lasted 40 minutes where I had a legal argument. I cried in front of the judge but, eventually, prevailed on all back child support and spousal support. I was not able to secure child support, moving forward, but I was able to set the payment schedule and things like that.

In Canada, if you're under the age of 25, you're going to school full time, and you're living under the care of a parent, you're still entitled to child support. Well, since my mom was gone, I was technically no longer living under the care of a parent. So, you know, that was a very traumatic experience for me.

But there was some levity, you know, during the proceedings. My dad was telling the judge that, you know, I was getting a philosophy degree and what good was that. And, you know, I could’ve gone into drafting which was on the radar at one time in my past. And the judge looked at him and said, “I have an honors degree in philosophy. She can be a lawyer.” And the whole courtroom basically erupted. But I swore I would never, ever be an attorney that moment on. And then, I kind of got over it.

I met my husband online. Did my own immigration. Married an American. And about a year into the marriage, I was like, “Well, you know, I went through this traumatic experience. I did my own immigration. I did this. Maybe there is something in law for me.”

So, you know, I like to say I had a legally blonde moment. And I woke up one day like Elle Woods and said, “I think I'll go to law school today.” So, I took the L SAT. You know, moved my family across the country, started law school, and found myself liking tax law, of all things. Anything but family law. So, that's one of the reasons I do family law-- I mean, sorry, tax law.

Tyson: So, talk a little bit more about why you did tax law because there's a little bit more to the story, because you started to help low- and middle-class households in law school. So, can you talk a little bit about that and what drew you a little bit more to tax law?

Charlotte: Two things, really, you know, drew me to tax law. You know, one thing, you know, because I was an immigrant, I didn't really understand too much about, you know, the American legal system to begin with. And I was, you know, thinking, “If I'm going to live here the rest of my life, I should know something about the tax law if I'm going to be subject to, you know, pay taxes in this country.”

The other major motivating factor for me was my law school, you know, year after year, kept winning these ABA Volunteer Income Tax Association Awards, the VITA program. The VITA program is in partnership with the IRS. And, basically, it's a volunteer program where they train volunteers and volunteers help prepare the income taxes of low- and middle-income families.

So, you know, it was very basic at first. You know, on what line does a W2 go? You know, where do I put this on form 1040? I didn't know. I didn't know the differences between deductions and credits, you know, and gross income, and net income, and adjusted gross income. I mean, I really started out with no knowledge, no background. Again, my background was philosophy and religious studies, not accounting, not business. So, I liked the intellectual challenge of it. I liked the curiosity of it. 

Tax Law isn't necessarily, you know, black and white. There's a lot of a lot of gray, a lot of wiggle room. And that's kind of what really piqued my interest.

Jim: So, how did that manifest as far as you starting up your firm? And maybe walk us through starting your firm up until that point, that week after you had your daughter, because I think that's a really remarkable part of your story. And, I'll be honest, that I read over your description this morning, and then I was listening to Bruce Springsteen on the way into the office, and I heard Tougher Than the Rest. And I think that you're a lot tougher than I thought you were. Not that I didn't think you were tough, but just everything with your dad, and your mom, and then your paralegal. Maybe walk us through that part of the story.

Charlotte: Sure.

I'll take one more step back. When I graduated law school was at the fallout of the last economic fallout, 10 years ago, with the mortgage crisis. So, you know, after law school, I did an extra year. I did my LLM program. Graduated. There was there was nothing in town. The only game in town was either foreclosure defense or foreclosure prosecution. And that was basically the only two things in town.

So, I took a job doing foreclosure defense, and short sale, and deed in lieu of negotiations. I was more on the transactional side. I didn't really like the way that the law firm was operating, so I quit and started a firm with a former employee of that larger firm.

That partnership didn't work out. We were only together about six months. Part of it was a personality issue and part of it was a distance issue. She was on the coast. I was, you know, in Orlando. She was taking all the distributions. I wasn't taking any. And I just think we didn't go into the partnership with eyes fully wide open. So, that only lasted six months.

But I wanted to start a firm solely on tax controversy litigation because I have a tax LLM. I want to practice tax law. And no one else was hiring for it. And if no one else was hiring for it, I was going to do what I was going to do to start my practice.

So, I started the practice with about 800 bucks. The main things that I tried to focus on was having a good headshot, having a physical space, you know, in a building, and then a little bit on advertising, not much. I think I paid $80 for an Avvo profile. And I got my clients in those early days by answering Avvo questions really, really well. I built a Wix site. You know, the building I was in, it was 100-square-foot office, no windows, but we had a shared conference room. We were downtown. The SEO was good.

So, I started the law firm as Erdmann Law PLLC. Well, no one knew how to spell my name. No one really knew where to find me. But I started to get a little bit of traction and known for the work that I was doing.

Eventually, I was able to start hiring help. And, at first, it was college students part time. Eventually, I had enough work that I needed someone who was licensed to practice before the IRS. So, I had this one brilliant assistant, full-time, hit her a lot of money in order to have her, you know. And then, I found out that we were expecting our first child, about 14 years into our marriage. My husband and I, of course.

So, moving forward with the firm, you know, we were trying to get everything ready, you know, that the firm would run smoothly when I had the baby. And my assistant was brilliant. She could basically run the law firm without me. So, I thought, “This is great. This is going to be smooth. I'll have the baby. You know, I'll start trickling in three, or four, or five weeks later.” And it just didn't go that smoothly.

I had the baby, which was on a Monday. And then got home from the hospital on the Thursday. And the Friday, my brilliant assistant who could run the firm without me, who I was expecting to run the firm without me, as that was the plan, she gave her two weeks’ notice and I was completely and utterly devastated. I was destroyed. Not only was I dealing with, you know, postpartum hormones, and the fact that I just had, you know, a baby, but basically everything that I had been working so hard to build, you know, the first four years of practice, you know, was basically crumbling down around me. It was terrifying, you know. And I was destroyed.

I mean, I was in tears on the phone. She was also in tears on the phone as well. I mean, we had a good-- you know, we had a good relationship, but I was just blinded by this. You know, looking back, I appreciated that she told me after I had the baby and not before, because I think that that would’ve been much more difficult. But my initial reaction when she told me was basically sheer panic and emotion. And I, basically, handed off my five-day-old baby to my mother-in-law and then, basically, cried for three hours.

And then, after I got that out, I just had to regroup. And, you know, I wasn't going to go down without a fight. And the first two things that I needed was I needed to find a nanny. And I needed to find a new replacement. So, I immediately, after I regained some sort of composure, took to Facebook, took to my network, and said, “I need a nanny. I need a replacement. These are the parameters.” So, within a week, after that, I had a new assistant, had a nanny.

And, you know, to give credit where credit is due of, my assistant. I mean, she had to leave for her own personal, you know, circumstances. I mean, she got a really big corporate job with all the bells and whistles with probably a salary double than what she was making, with health insurance, with all that stuff. And she stayed the entire two weeks. She probably worked 80 hours a week, those weeks, and then didn't put more than, you know, 40 on her timecard, you know. So, she didn't leave me hanging, even though it felt, in the moment, that she was leaving me hanging.

But we also had a major, major case that week, you know, as well. So, you know, the first two to three weeks of my child's life, I mean, I'm up till midnight, you know, nursing the baby, while I'm on the computer typing up a protest and working, trying to onboard the new person - everything else like that. But, you know, we got through it. We survived.

And, you know, I would say, within 10 months after that, we moved to my new bigger office, you know. And that was about two years ago - almost three. My oldest child is the one at the time. She's going to be three in March. So, you know, it's still pretty recent.

You know, in that time, I've gone from two people, me and her, to now we're an office of five. And now we're in a much bigger space. We're in our, you know, 900-square-foot office. Team of five. So, you know, we just kept pushing along.

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Tyson: So, Charlotte, I want to pause kind of right where we are right now and I want you to think about all the struggles that you've gone through - starting your firm, and losing people, and having to take your newborn-- a five-day-old newborn and give your child to your mother, to take care of. I want you think about all this stuff. And what advice would you give to people starting their law firm today? Because I'm sure you've learned a lot of lessons going through what you've gone through. So, what advice would you give a new lawyer starting their law firm today?

Charlotte: I would start with having a clear vision of what you want your firm to become in the future. You know, what does that firm look like? You know, are you are you niche? Are you in this specialized practice area? You know, what is the type of service that you want to provide? Do you want to be high volume? Do you want to be, you know, niche in quality? Do you want to, you know, grow large? Do you want to stay small? You know, really think about the vision for where you want to be, because you have the ability to control that. So, I would start there. And that's where I had started.

And, you know, it was the vision-- and not just the vision of the law firm and what it looks like but, you know, the vision for your life and how that law firm supports the story of your life because we all spend a lot of times in our law firm. You know, good amounts of time, good amounts of our life. And there's a trade off to that. There's a tradeoff for time that we don't get to spend with our family. There's a tradeoff of all these other things. So, you know, we need to enjoy and find meaning in in the work that we're going to do and in the thing that we're building. And it kind of has to be beyond ourselves but also fit into that vision of our life, you know, for our future and for our families. So, start with your vision. 

For me, the vision was be attack-specific, controversy litigation firm. And it didn't start out that way. I was doing foreclosure defense and short sales, whenever I could, to pay the bills. And I learned from scratch - my practice area. And I started there. And, as I was able to, I started dropping off the things that I didn't want to do.

So, you know, even now, if a tax case comes in the door, but it's not controversy and litigation, I send it out. Yes, I can do entity planning. Yes, I can do mergers and acquisitions but it's not what we do. And it doesn't fit within, you know, the current vision of our firm, so we send it out. 

Jim: I love that.

Charlotte: The other thing that I would, I think, recommend to new attorneys is, you know, is really get out there and network, you know, because it's a cheap form of advertising. And that's one of the biggest concern for new attorneys is “Where am I going to get my cases?” You know, you really have to try to create a name for yourself and you do that by getting out there. That was another reason why I got really active in my state tax bar association. So, I'm a director of the Florida Bar Tax Section. I found that that's really helped my business and also, you know, my knowledge base as well.

Jim: I want to pick up on the Charlotte giving advice questioning. And I've been talking Charlotte to two or three people in The Guild - Tyson has two lately, who are really on the fence about hiring someone. It could be an admin. It could be a paralegal. It could be an associate. Now that you have a good team around you, what advice would you have for those members who are struggling about when the right time to hire a new person is?

Charlotte: I would say a couple things. One thing is, you know, you need to value your time and, basically, use your time to its highest and best use. And, oftentimes, that's not pushing paper, doing mailing, opening the mail, scanning the mail, scanning the documents, you know, answering the phone. And I answered my own phone for the first two years. But you really need to clear up your schedule so that you can focus on your highest value items. And whether that's billing your big cases, or whether that's networking and marketing, whether that's focusing on the vision of your firm, you kind of need to clear that space to do so.

One exercise, that was shared with me, that I found was really useful, is basically, you know, writing out a list. What is the stuff that you hate to do? You know, write that down. You know, also write down the stuff that you love doing or that you only want to do. And I find myself going back to that list, even now, with a staff of five, and I still find myself doing the stuff that I don't want to be doing, but I'm better at it.

And so, hire out the stuff that you don't want to do. The stuff that's not the best use of your time. Otherwise, you're going to get overwhelmed.

I know one of the big concerns is money, you know, when it comes to hiring a new person, “Where am I going to find the money to do so?” Chances are that that person is going to be an asset and is going to lead to you making more money either because you're going to be more freed up to bill your time or to work on the marketing efforts to bring in the cases and to bring in the clients. So, you know, I think if you hire, the money will come.

But you also have to be very clear of what you're hiring for. And that's something that we have struggled with, you know, here in here in my firm a little bit as well. I was pretty resistant to hire an attorney for a while. And we've needed one probably for a while.

In my practice area, I deal a lot, obviously, with the IRS. And there's other authorized people who can speak to the IRS who are not attorneys. They can be CPAs. They can also be what's called an enrolled agent.

So, a year ago, it was just myself and three enrolled agents. We didn't have a dedicated and administrative person. We also didn't have a CPA. We also did not have an attorney. And it was a little bit more dysfunctional. One of the enrolled agents took on more of the administrative duties, but she still had some of her own caseload kind of thing. But there wasn't, you know, dedicated delineations of really people's roles and responsibilities. 

Throughout the course of the last year, you know, especially with COVID, there's been some shifting around with our positions. One of our enrolled agents left for another position. One of them left, because she was homeschooling five children and she has since come back. We also hired an admin person. And that's really her sole role and focus. And we also hired a CPA, in-house. And we also hired a new associate attorney. So now there's five of us total. And it's been the best thing.

I was really scared to hire an attorney, because I was scared that someone was going to come in and steal my business. I think that was the most terrifying thing for me. So, I was thinking, for five years of the six of my practice, “If I hire an attorney, they're going to come in and steal my practice. I'm just going to stick with enrolled agents or these other people.” But sometimes those other people can't do the same level of work as an attorney and you need to have an attorney.

And so, I think that that kind of lead me to the hiring process and to really spend a good amount of time looking for the right fit for an attorney. So, it took me over two months to look for the right attorney. And, basically, I was really upfront and honest. I'm like, “Look. This is the position I'm offering. This is one of my biggest fears, I'm scared that someone's going to come in and steal my business, you know.”

And I think there is the saying of the grinders, minders, and finders. You’ve got to find someone who doesn't want to mind a business, that wants to just grind out the work and to really be a specialist. So, you know, I believe that I found that person. And, so far, it's been working out really great.

Tyson: I really love that message, Charlotte. Unfortunately, we are up against the time. So, I am going to begin to wrap things up. I think we could probably chat for hours. This is just really interesting to me. So, just learning more about your stories has been really fascinating. So, thanks for sharing that.

But I am going to wrap things up. Before I do, I want to remind everyone to join us in the big group, if you're not in the Guild. So, join us in the big group. If you are interested in The Guild, go to maxlawguild.com. There are a lot of great people like Charlotte in The Guild that are willing to share their knowledge on a daily basis. And, if you don't mind, taking just a few seconds, at the end of this podcast, give us a five-star review, we would greatly appreciate it.

Jimmy, what's your hack of the week.

Jim: So, there are a lot of good books on growing fast or scaling up - including Scaling Up by Verne Harnish. And there's a great podcast called Masters of Scale by Reid Hoffman that I like. He has compiled a lot of the lessons that he learned helping start PayPal and LinkedIn in a book called Blitzscaling. I'm about a third of the way through it. And I like the book so much that I almost want to stop each chapter and make little slides for myself to really teach myself the concepts because it's written for fast growing tech companies, but a lot of the principles apply, especially as we're growing so fast here at our firm, that there's not a lot out there that I found that that I've enjoyed as much.

Tyson: I love it. Very good.

All right, Charlotte, you know the routine. What is your tip or hack of the week?

Charlotte: So, we've all been pretty isolated recently because of this whole COVID thing. But, you know, as stuff starts to open up and we're able to start having lunches again, I think, my tip or my challenge would be to go out to lunch with someone who you would not normally go out to lunch with. We are a nation right now in need of some healing. But also, there's so much that we can learn from someone who is different than us.

Oftentimes, you know, people complain about the old white man attorney in town. Go take him out to lunch. You know, he's probably got some great war stories, some great business tips, and you might find that you have a lot more in common. So, my hack or tip of the week is to go out to lunch with someone who we wouldn't normally go out to lunch with.

Tyson: I love it. That's perfect, so good.

So, last week, Jim was unavailable, so I had on Jason Selk and I interviewed him. And he talked about his new book a little bit. Honestly, he's amazing. Working with him, he was amazing. He's got a new book called Relentless Solution Focus. We actually bought one for all the people that work for Max Law. So, I've gone through it. It's a really, really good book. So, I highly recommend Relentless Solution Focus.

And then, also, if you need a coach, just a mindset coach, someone to help you get through some things, he's also great. So, I recommend that you reach out to him.

Charlotte, thank you so much for coming on and sharing your story. This has been really, really good. We really, really appreciate it.

Charlotte: Thanks for having me.

Jim: Bye, guys. Good stuff. 

Tyson: Bye. See ya.

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